United States of Awesome!

Just back from attending the Nantucket wedding of some very dear friends.  Hit NYC en route to the 'Tuck' and both were wonderful.  Incidentally next time you are in NYC, please dine at Blue Hill and Nomad.  Both were startlingly good.  And Nantucket...wow!!  All jokes aside about Nantucket Reds and critter-embroidered clothing, the island is remarkably beautiful.  It was truly a perfect weekend filled with old and new friends joined together to celebrate a wonderful couple.

And what a great time to be in the US.  Finger-pointing election banter aside, it really feels like things are improving.  I realize NYC and Nantucket are hardly a broad measure of the American economy, but the US stock market (both S&P and Dow) trading at multi-year highs is a real measure.  Moreover, NYC, the city where risk appetite is set, is buzzing.  Real estate is flying; Restaurants are packed at 10:30 on a Sunday night; Hotels are at occupancy; Gyms are charging U$30 for a group spin class..WOW!   Likewise my favorite company Apple (see previous posts), just topped U$700/share following reports of massive iBinging.

I'm not trying to be unrealistically optimistic here.  It's worrying the US has a fiscal deficit problem that must be addressed.  But, for now, it looks like the stock market is the place to hide.

Tale of a Tacky Thief!!

Two days of beautiful weather here in HK.  Would have been the perfect weekend except I had my credit card number stolen.   The most frustrating part is that I will now need to re-set all my Auto-pays.  What a pain!  That said, I was mildly amused to  hear the thief used it to go on a Burberry binge in Canada.  Anyway, to this morally bankrupt but materialistic character: You probably look ridiculous draped head to toe in Burberry plaid!  Irony is I've always been wary of Asian people clad in Burberry, guess I have good reason now.    

Pretty inconvenient time to have a defunct card as I'm headed to the US this week.  It's a quick trip to attend a wedding but I'm also pretty interested to see how it feels in the US.  Election year banter is painting a really tough picture of the American economy, but US markets are trading at multi-year highs.  What gives?  Anyway, I'm excited to go check it out for myself and can report back then!!        

Labor Day Envy!

Labor Day in the US and I'm envious.  Actually, given how easy US markets have been (relative to Asia, specifically China), I think I deserve to be a bit jealous.  After all, it's those of us here in Asia that have been having a bit of a mare while the US seems to be chugging along.

Accordingly, Ben Bernanke set everyone up for a restful Labor Day with his benign address at the FOMC meeting in Jackson Hole.  While not being specific, he made the case for further easing to help the US economy.  Interesting that everyone's so quick to believe Ben.  Meanwhile China's governments (both at local and national levels) have earmarked over RMB20T in economic stimulus and the market can't catch a bid.  Pretty discouraging as RMB20T is a massive sum - in fact, it's roughly 40% of China's GDP.   Tough times for those who subscribe to the theory of 'just throwing money at the problem'.  For now, China's acting more like the oft-cited complaint 'mo money, mo problems'.      

    

Red White & Bullish

It may be ok to bookmark net-a-porter into your favorites again!!  Are the days of austerity over?   It certainly seems to be the case if you are in the US.  Yes, there the are the doomsday politicians offering harrowing tales of 'fiscal cliffs', however, that doesn't seem to matter right now.  US markets are trading near 4 year highs and US housing seems not only to be recovering, it's flourishing in some cities.      

Great if you're long US real-estate.  Unfortunately, for me, while I've been talking about it ad nauseam, I have not pulled the trigger.  Frustrating as I've been looking to this for some time (see US Housing posts).  While I only have myself to blame, my geography handicapped me a bit as well.  Not only was I too far to concentrate on it, the time zone always works against me.  Moreover, my close proximity to Chinese markets (that are near 2009 year lows) has made it difficult to get overly bullish.

Hmmm..sounds like we should all bookmark some US real-estate websites and hold off on net-a-porter (for now).

Olympic 2012 Wrap-Up

Sadly the Olympics have come and gone.  Actually while I'm disappointed it's over, I'm kind of relieved I don't have to hear any more of Bolt's annoying boasting.  Yes, he's an amazing athlete!  But a little grace and modesty (even if it's fake) would go a long way.  We're certainly not seeing Michael Phelps brag shamelessly.  On that note, what a great year to be an American!!  Kudos to our Olympians (particularly women) on an outrageous performance.  Likewise, a serious Congratulations to our cousins across the pond - Great Britain!  Frankly, having seen the 2008 Olympics, I  had worried it might be impossible for anyone to come close to the show staged in Beijing.  But, the Brits pulled it off.  They staged an original, tasteful, memorable event and won a ton of Gold medals along the way.

Incidentally, the 2012 Olympics serves as an apt analogy to current market dynamics.  China's 'dream economy' continues to battle growing (or lack thereof) pains.  Meanwhile the US markets look to be muddling through (despite the negative campaign rhetoric).   In fact, I'd argue there are some genuine signs of a housing recovery emerging in the US.  And, need I mention the thriving London housing market?  Admittedly most of it due to an exodus of of wealthy denizens from the Middle East, Russia and Euro-zone countries.

Let's wrap it up here.  It's a Monday night and I'm finally Olympic-free so I need to catch up on my sleep!          

              

Americans Abroad

Yes!!!  Just received confirmation of an upgrade for my flight to Europe tonight.  Can't wait!!  Although, it will be interesting to see the mood in Europe.  Incidentally, what's the mood like in the US?  Recent jobs data and the Obama/Romney mud slinging campaign had me worried that the economy is slipping fast.  But, then, US markets are faring very well with the S&P Index trading near 3 year highs.  Note to self: Good conversation piece for the  'fanny-pack sporting' American tourist clad in 'white socks with sandals'.  You know the type - Super friendly and harmless, albeit a little loud.  On my last trip to Paris, a very nice but clearly overwhelmed tourist, (with a very poorly downloaded American translation of a Paris city map) asked me how to get to the Avenue of the Champs!

See you when I get back!!        

Silkfred.com - Check it out!

Booked my flight to the US.  Will be headed there in May to see one of my best friends from childhood get married.  So interesting to see what happens when everyone's all grown up.  This friend has a particularly cool story.  One of the academically brightest people I have ever met, she has also taken some cool risks professionally.  Started her career at Vogue to later became the fashion editor at Nylon and eventually launched a very well regarded eco-fashion line called Bodkin.  Unfortunately, she did so in 2008 which we all remember was a bit crap (understatement).  Her line won a bunch of accolades but it was still tough going.  Incidentally brings me to my next point.  Discovered this super cool site called silkfred.com.  It's a website for emerging designers.  Despite being a confessed Jbrand junkie, I do really believe in supporting fresh designers.  Actually have to brag one of my best sartorial investments EVER was my Peter Som shearling coat (purchased right before I was transferred to hot/humid HK).  It's from his very first collection and would make even his biggest fan, Michelle Obama, pretty damn jealous.

Speaking of American designers, the American stock markets are acting very well.  Indeed tech helps, Amazon is the latest tech company to report blow-out numbers, but the real estate market is humming along nicely too.  Jobs (or lack thereof) are still a looming concern but that's nothing compared to things going on in Europe.  We talked about Holland, Britain just entered a technical recession while I see credit agencies have downgraded Spain's debt (again)!

Aaghh..STRESSFUL!  I have to wrap it up here.  It's Friday and I'm ready to call it a week!

back to work...

Holidays over and it's back to work this week.  Actually I should not whine about having to work as many Americans are still struggling without jobs.  US employment data was out Thursday and March new jobs was very weak at 120,000 new jobs.  Markets globally are struggling to digest such a weak number.  Jobs - it's definitely going to be the most important 4-letter word in the upcoming election.

While struggling unemployed is nothing to be taken lightly, seems the old adage 'mo money, mo problems' is playing out here in HK.  Note the biggest story right now is the arrest of the billionaire Kwok brothers.  They are the boys behind HK's biggest property company Sun Hung Kai.  They're accused of graft and apparently the chatter is that their older brother Walter is the one who turned them in.  Estranged eldest brother Walter Kwok was ousted from the company in 2008 after years of conflict.  Urban legend has it that the relationship has been strained since Walter's 1997 kidnapping where the younger brothers may have been a bit slow meeting the ransom.  All very intense stuff.

Other bizarre news is that crazy Maryland lady who says she won the mega-millions lottery but lost the ticket.  Whole story is bizarre with allegations that the ticket was part of a work-place pool while she claims it wasn't.  It all sounds like one crazy lady's antics.  Actually, for her, I do hope it was all a giant publicity stunt because as someone who loses EVERYTHING - could you even imagine??

   

Short but not easy...

Short week with Easter Holidays and Qingming holiday in China.  However markets are acting tricky.  Minutes from the last Fed meeting was released on Tuesday and it was sobering (literally).  Now increasing concerns that all the cheap money the Fed has been plowing into the economy may be coming to an end.   Hard to be the Fed right now - they're kind of stuck between a rock and a hard place.   Many are arguing the FED must stay loose as the US economy is still weak.  Conversely the other argument being that the US economy is sufficiently revived and the Fed needs to step back.


Just like it sucks when a party runs out of libations, it's always tough for markets when the Fed starts acting more prudent.  Guess it's wait and see.  Accordingly, I would recommend you do a brush up on US banks.  If we do see interest rates in the US start to rise, you'll want to know your banks.          

I miss election years...

Sick of watching American politics?!?!  Well things can be worse.  In China it's a transition year.  Note that's very different from an election year.  Happens once a decade and it's truly a lame duck year.  While US politicians are busy at working trying to win your favor and get re-elected, Chinese politicians are in wait and hold.  Partially explains why the Chinese Government has been so quiet as of late.  Meanwhile just last night Fed Chairman Bernanke commits to further helping the economy if necessary. 


Yes indeed the strong silent type can make for fun early dates.  However the prolonged silent treatment also runs the risk of exasperation.  That's kind of what we're seeing in markets.  China's making it too hard.  That explains why US markets are +30% over the last 18 months while China hasn't done anything!  Plus, you get the extra holiday on election day.  How I miss election years...

American Banks finding lots of fans...

Talk about timing!  I just finished yesterday that banks were behaving well and this 'Why I am Leaving Goldman Sachs' op-ed piece has gone viral.  Basically it's now former employee Greg Smith's resignation.  Smith for right/wrong reasons takes a less conventional method of resigning and does a Jerry Maguire on his former employer.  Using the NY Times  as his vehicle, he resigns via a public/scathing indictment on the culture at Goldman.  If you haven't already, have a look.


That aside, everyone seems to love American banks right now.  Premise being that US economy is improving and therefore interest rates are likely heading higher.  Indeed tightening can be painful but rising rates in a healthy economy can  actually be good for banks.  Note many of the biggest/smartest guys in the room are agreeing here.  See where Warren Buffet stands on the sector.  A lesser known but extremely highly-regarded expert on the space Meredith Whitney (who presciently called the sector a disaster five years ago) concurs.  


That's probably it for me this week.  I'm off to London.  Chat next week.

The importance of being CLEAR...

Diet is over.  I lost a few pounds but the goal of cutting a perfect Angelina Jolie silhouette remains elusive.  Although, while she's HOT (and I covet her man), why does she act so strange at the Oscars?  Yes, the bizarre 'bossy hooker' pose she struck on stage this year, but remember when she open- mouth kissed her brother in 2000?   Whatever - she is with Brat Pitt - she can do no wrong.  


Diet behind me, indulge I did last night. I stayed out way too late!  Speaking of partying, remember my post 'Make it rain'?  It was my explanation of the US Fed.  They are the guys who say how the US will be spending (or not spending)!  I likened them to the dudes in the club saying 'make it rain.'


Now some people are starting to worry the party is getting out of control and want the Fed to tighten things up.  Indeed all that money they are throwing around isn’t free and can't go on forever.  The argument being that the economy is picking up and we should start sobering up. Otherwise, we could face inflation problems.  Rising prices when a lot of people are still struggling financially is not a good predicament.  Well, the jury is still out and Wednesday Fed Chairman Ben Bernanke was noticeably a bit vague.


And markets appreciate an unclear Fed about as much as we enjoy mixed signals from our boyfriend.  On that note, I'll finish up here.  I'm sorry if I'm a bit vague myself today.  It was a late night! 

Life imitates Lilo

Really worried about oil?  Pray to the Weather Gods (literally).  Warm weather is saving us.  Even though we’re paying more at the pump, it’s costing us less to heat our homes.

In other good news,  Lindsay Lohan is in the homestretch to complete probation.  Nice LINZ!  Come on - lets be happy for her.  Yes, she screwed-up a lot but she seems to be getting it together. I actually feel a little bad for her when I see her truly crazy parents.  Not exactly role-models.  Also, she is aging really really badly and she WILL regret that.

Ironically Lindsay’s career and legal problems coincides really well to the housing collapse in the US. Like Lindsay’s early career, we had a raging time where everyone loved us and could not get enough of us.  US housing only went one way and we were happy to believe it was never ever going down.  High on confidence (Linz was high on something else) we spent lavishly.  However serious cracks started to emerge in 2007 (for both) which basically spiralled into a total trainwreck (and then it was game-over).  On Jul 6, 2010 when Linz donned orange and joined the inmate population, it definitely looked like her E True Hollywood store was done/dusted.  We can say the same about US housing where everyone wrote it off as Gone-zo/Dead.

However, like Linz, looks like things are looking very much on the up and up for US housing.  Chatter has been growing recovery is nigh  but many shrugged it off.  Now disbelievers are really getting backed into a corner.  Wednesday’s US housing data was very encouraging.  Existing home sales rose 4.3% (highest in 18 months).  And the supply of homes on the market has plunged to 2.3 million,  lowest level in almost six years.   If we continue at this pace  we’ll clear these homes in six months.  That is good for prices.

Couple this housing data with unemployment at 8.3% (lowest level in three years) and certainly the US is headed in the right direction.    Yes we still have demons (Greece and Oil are the big ones) but nobody’s perfect.  Lindsay could tell you that.

Admit it, you've been splurging!! :)

Who’s the most obnoxious TV personality?  Well, I'd bet Jim Cramer on CNBC could compete.  That said, I appreciate his passion for markets and I watch his show Mad Money often enough.  Recently he did a 'Oils well that ends well' segment and I agree. It would be really bad for everyone if the recently revived US consumer gets crippled at the pump.  A lot of the global economy is banking on him to take that cruise  to Hawaii and return with that Chinese-manufactured ‘Waikiki Beach’ T-shirt.  He is absolutely right gas at $5/gallon is a problem. 

Everyone's worried because so far the United States of Consumers has not disappointed.  Incidentally Tuesday was judgement day for this.  Saks, Macy’s, Home Depot and Walmart all reported earnings.  I hope 'The Birds and the Biz' followers can guess what happened.  Home Depot had strong numbers (see US housing posts); Sak’s and Macy’s both beat (remember that crazy Sak’s shoe-page?).  Meanwhile Walmart (with those crazy post thanksgiving mobs) disappointed on heavy discounting.  They were basically selling a $5 DVD player and then throwing in the complete box set of ‘Saved by the Bell’ for free!   Also, bad news for recession-istas who mastered waiting for the sale – Sak’s CEO said full price is coming back.

Damn!...just when we were getting accustomed to discipline and restraint.  You see, one of the casualties of the 2008 financial crisis was conspicuous consumption.  Recession-istas became regular Vogue vernacular and home austerity measures were sources of pride and delight.  Particularly on a trading floor where men (intentionally sporting last year’s Brooks Brothers) proudly boasted of their wives' newly frugal ways.  Those who didn't accept the new normal bordered on ridiculous.  For example, Paris Hilton frocked head-to-toe in Gucci looked outright stupid (I saw her in Aspen this year and she doesn't carry her own skis!) while Kates (both Moss and Middleton) in Top Shop brimmed of style and good taste.  

But seems we’re all kidding ourselves and hiding a few 'harmless splurges' from our husbands/boyfriends.  Sorry, the secret's out.  Nearly all of the high-end luxury retailers reported awesome numbers  (LVMH, Coach, Richemont, Burberry, Feraggamo, Michael Kors) with plans for expansion.  Indeed a lot of Chinese blinging-out but numbers were solid all-around.  Think the Gucci brand was the one exception but (yuck) Paris wears a lot of that!  

President's Day - Celebrate America (Foreigners certainly are!)

Wish we had a four day week here in HK.  But I wish for lots of things.  Speaking of,  one very lucky 22 year old Russian girl was gifted a U$88m Central Park West penthouse ( the most expensive home in New York).  I think I got a Banana Republic sweater and dined at TGIF for my 22^nd. Anyway I’m just jealous - lucky lucky lady! In other rants, UUGH- Brazilians get all the breaks!!  Ridiculous Gisele-like genes and Brazil recently overtook the UK to become the sixth-largest economy in the world.   Some potentially bad news for single NY women here (as if Manhattan men weren’t already spoiled-for-choice), Brazilians now binging on Manhattan (and Miami) real estate. 

What's all the fuss about American real estate? Wasn't it just recently when US housing was imploding?   Well, things are changing fast with some of the BIGGEST US Housing haters now saying ‘Beg/Borrow/Steal- Buy US homes now!’  John Paulson/ Marc Faber/ John Talbott and even Greg Lippman (from ‘The Big Short’) to name some of the more notable guys.  To put this in context – these guys were among the most outspoken ‘US Housing is Screwed’ prophets – so their conversion would be on par with Marilyn Manson finding the Lord.

Why do I side with the newly converted?  Record low mortgage rates (30 year FIXED sub 4%); tight inventory after a three year drought in building (2009 was actually the lowest since record-keeping began in 1959);  more affordability relative to income (means it will no longer take 95% of your paycheck and 100 years to pay back your mortgage) and things are simply cheap.    Quoting Lippman ‘many cities across the country are now selling for as little as $60 to $70 a square foot….a 50% to 65% discount to the costs you would incur if you tried to build a similar home today in these cities.’  Basically means even if you physically chopped up trees and built that house yourself (which we would never unless maybe it was with Ryan Gosling in the Notebook),  it still doesn't get cheaper. 

Meanwhile the Obama administration is working its butt-off to support the housing market (and of course get re-elected).  Obama’s Heal Housing Plan includes plans to allow home-owners to refinance at record low rates as well as a government supported Real-Estate Owned (REO) pilot.  This is basically a government supported plan to sell foreclosed homes to investors who in-turn promise to rent them back to the occupants. You see, as a home-owner you want an abandoned house (or foreclosed seller) on your street about as badly as you want a meth lab.  And this solution would hopefully help stop people from just going MIA.  Indeed still lots of skeptics (particularly Republicans) but foreigners seem to need far less convincing.  Well-tanned foreigners now account for more than 65% of all condo and home sales in Miami. At this rate, loud-mouthed Americans better brush up on their Portuguese.  

California Dreaming

Ladies – it might be ok to start splurging on that Chanel bag as things are looking a lot better.  Maybe we don't feel it as much in HK which is a bit too finance-tastic or we have too many banker friends laid-off,  but don't get blinded.  Did you know there are more Silicon Valley millionaires than the dotcom hey-day and lots of billionaires this time too. Unfortunately we can’t all work for facebook (be wary of guys who say they do because it’s become quite the pick up line), but seriously good for asset prices (houses and stocks but diamonds too J).  Also, while you may hear bankers complaining about bonuses and lack of cash – don't forget their stock awards are now up 15-20% from where they were awarded just a few short weeks ago.  

Yes European debt crisis is still looming (Greeks are behaving badly) but I don't like armageddon scenarios (I’m a Lehman survivor) and Europe is simply too big to fail.  Bit cliche, I know, but I think that policy response will be a global coordinated effort…I mean seriously can you imagine Europe imploding?  World won’t let it happen.  Although things will be bumpy in the next few weeks with a lot of decisions to be made.  As an aside, I was in Paris and they marked up everything – Pricing adjustments seems to reflect a weak Euro and really nothing was that cheap.  

Recently I made a bet for a business class flight to US with my friend that Obama is going to be re-elected.  I’m so excited for November to see this materialize.  Not because I like Obama but more because I'm confident it will happen.  US is recovering at an amazing pace and housing is coming back in a big way.  Not only because employment is improving but cheap interest rates and (stealing from KRUGMAN here) ‘US is seriously under-housed by historical standards (we’ve built very few houses in the six years since the housing bubble popped) and the sharp fall in household formation — econospeak for lots of young adults living with their parents because they can’t afford to move out.’  THIS IS TOTALLY TRUE, my brother is 25 and all his friends had to move home post college (haha and he too is living with me!).  Anyway will wrap it up here - if you’ve been looking wistfully at California properties (like me), I think it’s time to get serious.